Global Courant
The GPT-4 logo can be seen in this photo illustration on March 13, 2023 in Warsaw, Poland.
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AMSTERDAM, Netherlands – Major banks and fintech companies claim they are piling into generative artificial intelligence as the hype surrounding the buzzy technology shows no signs of dying out – but there are lingering fears of potential pitfalls and risks.
At the Money 20/20 fintech conference in Amsterdam, Netherlands, executives from major lenders and online finance firms sang the praises of generative AI, calling it an “explosion of innovation” and saying it will “unleash innovation in areas we can “don’t even think about it.”
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Chalapathy Neti, head of AI at global banking messaging network Swift, described the progress made with ChatGPT and GPT-4 as “mind-boggling”. He added, “This is truly a transformative moment.”
But in the short term, banks are struggling to figure out the use cases.
The Dutch ABN Amro is a banking giant testing the use of generative AI in its processes.
Annerie Vreugdenhil, chief commercial officer of ABN Amro’s personal and corporate banking division, revealed to a panel that it uses the technology to automatically summarize conversations between bank employees and customers. It also uses it to help its employees collect data about customers to help answer questions and prevent repeat inquiries.
The bank is now scaling up these pilots to 200 employees and is investigating a number of new pilots that will start this summer.
Meanwhile, in a private session on the application of AI in financial services, two bank executives explained how they use the technology to improve their internal code and analyze how their customers behave.
“We are experimenting at this stage and we don’t necessarily have anything the customer has to deal with, but we use (technology the same) as other companies, for example code refactoring, communication calls, the other way around,” says Mariana Gomez de la Villa, an executive at ING Bank specialized in strategy and innovation.
Indeed, the banks seemed unanimous in their reluctance to roll out ChatGPT-like tools to customer-facing scenarios.
Jon Ander Beracoechea Alava, head of the advanced analytics discipline at Spanish bank BBVA, said the lender had taken a “conservative approach” to AI, adding that generative AI is “still early” and “immature” at this stage.
A crucial issue is that advanced AI systems require the processing of huge amounts of data – a sensitive asset wrapped in all sorts of rules and regulations. As such, Alava said it was too “risky” to involve sensitive customer information at this stage.
Generative AI, explained
Generative AI is a specific form of AI that can produce content from scratch. The systems take input from the user and feed it into powerful algorithms fed by large data sets to generate new text, images and video in a way that is more human than most AI tools already on the market.
The technology was thrust into the spotlight following the success of OpenAI’s GPT language processing technology. ChatGPT, which uses massive language models to create human-sounding answers to questions, has sparked an arms race among some companies over what is perceived as the next “paradigm shift” in technology.
In March, Goldman Sachs chief information officer Marco Argenti told CNBC that the bank is internally experimenting with generative AI tools to help its developers with automatic code generation and testing.
More recently, in May, Goldman spun off the first startup from the bank’s in-house incubator — an AI-powered corporate social media company called Louisa. The move to AI is part of a larger effort by CEO David Solomon to accelerate the bank’s digital makeover.
Morgan Stanley, meanwhile, uses it to inform its financial advisors of any questions. The bank has so far tested an OpenAI-powered chatbot with 300 advisors, with the goal of eventually helping its approximately 16,000 advisors use Morgan Stanley’s repository of research and data, said Jeff McMillan, head of analytics and data at the bank. asset management division of the company.
AI ‘co-pilot’
These are just a few examples of how financial companies are using AI, but more as a digital helper than as a core part of their services.
Gudmundur Kristjansson, CEO and co-founder of Icelandic regulatory technology company Lucinity, showed CNBC how artificial intelligence can be used to help with an important area in the financial world: fighting crime.
An AI tool the company created, called Luci, aims to help compliance professionals with their investigations. In a live demonstration, Kristjansson showed that he was investigating a money laundering case. The AI tool analyzed the case and described what it saw, then completed an independent review.
In this use case, the AI acts more as a resource – or “copilot” – to help an employee find data and work out a case rather than replacing the role of a person investigating reports of suspicious activity .
“Where you find money laundering is through … interconnected networks of people who are essentially employed by it. That’s why it’s so hard to find. Banks have spent $274 billion on prevention this year,” Kristjansson told CNBC in an interview.
He said Luci helps by vastly reducing the amount of time spent trying to figure out if something is fraud or money laundering.
The whole appeal of AI to the big banks and fintechs, Money 20/20 participants said, is the potential reduction in the time and money required to complete tasks that could take human employees days.
Niklas Guske, chief operating officer at Taktile, a startup that helps fintechs automate decision-making, acknowledged that using AI is challenging in the financial industry given the lack of publicly available data.
But he stressed it could be a “critical” tool to lower the companies’ operating costs and improve efficiency.
“In many fintech applications, this is done through more automation and less manual processes, especially in onboarding and adoption,” he told CNBC.
“This automation is really enabled by access to more data sources, enabling lenders to gain new insights and identify the right customers without having to sift through dozens of PDFs for the right piece of information.”
— CNBC’s Hugh Son contributed reporting.
